Nobody loves numbers more than your boss. Except his or her boss. Oh, and your boss’s boss too, unless you’ve already reached the top of the totem pole.

Web analytics tools are at their most powerful when you can interpret and integrate the numbers they provide—the rapturous layers of percentages and pie charts—with what happens in the context of your organization’s business, outside the world of site visitor data. Did you get all that?

In two recent SIGMA web analytics engagements, the key to the findings wasn’t was happening on page 27 of the site, or who was coming from Google. The key was to find the magic number—the value of what the online conversion or successful engagement meant to the company.

For Company #1, the magic numbers were 36%, 38%, $62, and $85.

Right out of the gate, an online customer was driving 36% more revenue when compared to all the other ways a customer might complete a transaction: whether that was walking into a store, responding to a piece of direct mail, or getting a telemarketing call.

And, better still, 38% more online customers were taking the most glorious step of all—allowing the company to automatically charge recurring fees on their credit cards, which drastically reduces marketing costs for a sizable chunk of the customer base.

In short, it was a total landslide victory for the value of online customers – even before the findings from customer profiling showed online customers were smarter, richer, better looking, and kinder to children and animals. (Okay, maybe we were not able to discern which species of animals they were kinder to - just from online data - but you get the point.)

Then once you have the real number on the table—that online members are worth $85 each vs. $62 for offline—it becomes that much easier to answer the channel allocation question when it comes to how you want customers to respond to your marketing programs. All things being equal, $85 multiplied by tens of thousands is far more palatable than $62—and with the added bonus for the client of being able to leverage the Web for 38% in additional recurring fees, it’s clear that driving prospects online to become customers—even considering incentives for them to do so – is the optimal route for the business.

Similarly, the magic number for Company #2 was $39.50—the amount of money saved for each customer who had his or her service question answered online as opposed to calling into a customer service representative.

Company #2 was also a terrific example of how to gauge the value of and make the business case for a website whose primary purpose is not direct sales to customers. That $39.50 figure for a successful customer service outcome, when multiplied by the hundreds of thousands of customer interactions per year, could add up to roughly a zillion dollars in cost savings for Company #2, more than a big enough goal that serves as the strategic basis for incorporating systems for acquiring customer feedback and consistently striving to improve the quality of online customer service a customer can find online.

By establishing the value of successful customer service interactions and putting in place a system for determining when one of those online interactions is truly successful (because you can’t truly know from a page view or an exit page), the company was able to develop a framework for the website’s impact on its finances, not as a generator of revenue but as a money saver to be maximized.

It would be interesting to know for company #1 whether the incremental revenue is due to the online channel or if it just was the case that people who purchased online had a higher proportion from the group who made high value purchases. If the former, then yes, you want to push people into using online. If the later, then all you will do is shift people who spend an average of $62 from offline to online (possibly through a higher marketing spend). Back to the whole cause and effect question.

If you can provide a good hypothesis for why the same person would spend more online compared to offline (e.g. easier to see a list of upsell products) and ideally prove this, then the recommended strategy to adjust the channel allocation is sound. If all that has been done is to define the current nature of people who shop online compared to offline, then this strategy will not optimise business performance.

Do More With Your Data.

SIGMA Marketing Insights is a boutique marketing services firm obsessed with the customer experience, and driven to turn data into a powerful tool that will deliver more relevant, personalized interaction and engagement across all channels.